AgriTalk December 16, 2014 Mike Adams Hosts a Panel Discussion on Agricultural Trade Issues Note: This is an unofficial transcript of an AgriTalk discussion. Keith Good FarmPolicy.com, Inc. Champaign, IL www.farmpolicy.com Mr. Adams: Last week at the Farm Journal Forum in Washington, D.C., a great panel was put together, and we re very fortunate to be able to talk with them here on our program today. Stephanie Mercier, Senior Policy and Advocacy Advisor for the Farm Journal Foundation; Ambassador Darci Vetter, Chief Ag Negotiator in the Office of the U.S. Trade Representative; Nick Giordano, Vice President and Counsel for International Affairs for the National Pork Producers Council; and also with us Ellen Terpstra, President and CEO of the International Food & Agricultural Trade Policy Council. Thank you all for being with us. Stephanie, certainly a big focus at Farm Journal Forum was on trade, and you had a great panel, a lot of good discussion on this. Ms. Mercier: Yeah, I was very pleased with the active and lively conversation we had in our panel. We had a lot of really good questions from the audience as well, so I think all in all the panel discussion went very well. Mr. Adams: Let s get right into some of the issues. Ambassador Vetter, thank you very much for joining us here on AgriTalk. Can you give us an update on TPP? Ms. Vetter: Sure. It s my pleasure to be here, and happy to give you an update on the TPP, or the Trans-Pacific Partnership. As you know, it is a trade agreement being negotiated with 12 Asia Pacific nations, representing 40% of global GDP, so the potential here for economic gains is really significant. And these negotiations are really entering the final stretch. President Obama convened a meeting of the TPP leaders on the margins of the APEC Summit in Beijing just last month, where they recommitted themselves to using these next several weeks to make those critical decisions and to bring these negotiations to a conclusion. In fact, the TPP negotiators are in Washington just this week, and trying to close out all but those most sensitive issues that will require perhaps some higher-level attention.
And really pleased that both in the rules arena, addressing issues like sanitary and phytosanitary measures, intellectual property and others, as well as those key tariff negotiations or the market access talks really are entering that ending and critical state. Mr. Adams: Has there been any movement or signs of willingness to move by Japan on these tariff issues? Ms. Vetter: You know, we are making good progress with Japan in both the rules and the market access arena, as we are with the other economies at the table. As you know, Japan has not previously included agriculture in its free trade agreements or the economic partnership agreements, as it calls them, and so this is a new foray for Japan. But frankly, the TPP itself, the collection of nations, the high standard they are seeking both in rules and market access created, really, a situation where they were willing to put those tariffs and those quotas on the table for the first time. And so we re working hard with them. It s difficult. It s sensitive negotiations. But we re confident that we re going to achieve meaningful market access across the broad range of agricultural products for U.S. producers and processors. Mr. Adams: Nick Giordano, for pork producers and I know many others in U.S. agriculture, that s the key area, right, market access, tariff reduction with Japan. Mr. Giordano: Well, it is, and when you look at TPP, as Ambassador Vetter said, it s a negotiation with the fastest growing area of the world. When you look at Japan and the other countries, it will be the single most important trade negotiation not just for pork, not just for agriculture, but for the entire economy. And I believe, given the gridlock in Doha, that TPP is going to become the de facto platform for future global trade, [globalization]. Countries are already lining up to come in. So it s incredibly important that we get it right now, before it expands and our voice begins to get diluted. We ve got to set the rules right. And right now, you know, Tokyo really holds the keys to the car. And I commend Ambassador Vetter and this administration for not allowing the Japanese to dictate the terms of the negotiation, but for working hard to get the best possible outcome for the United States and to have this look like our past FTAs. And we re very optimistic that we can get there, as difficult as it s been. Mr. Adams: Ambassador Vetter, do you see any scenario where we would have a TPP without Japan? Ms. Vetter: Well, I think it s in our interest to have a TPP with Japan, frankly. As you know, it s an important economic driver in the Asia Pacific region. It is already an important trade partner for the countries at the table, including the United States. I mean, Nick has been focused on these negotiations in part because Japan is our number one export market for pork, for beef, it s number three for rice. We have a very strong trade relationship with Japan on agriculture, despite the fact 2
that they have very high tariffs and can have very difficult to navigate quota administration and other barriers. And so the potential, if we can work to get rid of some of those barriers and dismantle them, is really quite vast. I think it s also important to note that Japan plays that same role for many of the other TPP partners at the table, and so I think there s a real desire to have Japan at the table, but to work with them to achieve the high standard agreement that we all set out to negotiate when we came to the table in the first place, and so that s what we re endeavoring to do. Mr. Adams: Ellen Terpstra, for those that are skeptical of trade deals and wonder if the U.S. really gets a good deal in these or not, what do you see as the potential here? What does this mean for the United States to have a successful TPP? Ms. Terpstra: Oh, I think it s extremely important for the U.S. in terms of not just agriculture, but overall. This is where the growth in the population and in the middle class is going to be in the next 35 years. It offers tremendous potential for the United States. But it also offers, very specifically, a faster track on tariff reduction or tariff quota expansion, and on addressing SPS issues compared to any other way that we could achieve that. Mr. Adams: Ambassador Vetter, how important is trade promotion authority? Can you get a deal done without having TPA? Ms. Vetter: Well, trade promotion authority, of course, is critical to getting a trade deal across that finish line. It is, for those who don t speak trade speak every day, trade promotion authority is the procedure by which Congress essentially gives us, in the administration, a series of negotiating objectives that we should achieve with our partners. It outlines procedures we should follow for how we coordinate with Congress and with stakeholders to make sure that we re meeting those critical objectives and we re doing so in a way that keeps our constituencies informed, and in exchange for following those guidelines and objectives, Congress would then agree to consider the agreement on an up or down vote. That s critical because our negotiating partners need to understand that the deal we re striking today is the deal that will be on the table at the end of the day, when it s time to put this agreement into action, and that members of Congress or others won t ask for significant amendments when it s time to take that deal across the finish line. So it is critically important. The administration is working very closely with both houses of Congress, and in a bipartisan fashion, and are hopeful that we can address TPA and move it forward early next year. At the same time, however, every one of the TPP partners has its own domestic process that it has to go through to turn that agreement into its legislation, so we re not alone in having those procedures to go through. And there s significant momentum at the TPP table right now to conclude that agreement, so we need to be able to pursue both of those things in parallel and in close consultation with 3
Congress and with the stakeholder community to make sure that we get the best deal possible and that we can deliver it and implement it for the United States. Mr. Adams: You mentioned that you re kind of in the critical stage for the negotiations right now. Is there any kind of timetable for TPP? Ms. Vetter: Well, we ve said all along, and it continues to be true, that the substance is going to drive the timing. The negotiations will finish when we re sure that we have an agreement that serves U.S. interests and the interests of those other countries well. But we are making very significant progress, as I noted. The chief negotiators who are meeting in Washington this week are really entering that phase where some tough decisions have to be made, and outlining some of those most sensitive commitments in the negotiations. So again, I do think our negotiations are entering the end game, but the timeline will be decided when we can resolve those tough issues. Mr. Adams: All right. We are talking with the panelists from last week s Farm Journal Forum that was held in Washington, D.C., a very good panel on trade, and our guests today are Stephanie Mercier, Senior Policy and Advocacy Advisor for Farm Journal Foundation; Ambassador Darci Vetter, the Chief Ag Negotiator for the U.S. Trade Representative s Office; Nick Giordano, Vice President and Counsel for International Affairs for the National Pork Producers Council; and also with us Ellen Terpstra, President and CEO for the International Food & Agricultural Trade Policy Council. [Break.] We re going to take a break. When we come back we re going to talk much more about trade. We want to talk about the potential of a trade deal with the European Union and just take a look at ag negotiations overall, trade negotiations overall and how agriculture plays a part in these negotiations, and what s the potential moving forward with these trade deals. All that coming up. Stay with us. We ll continue on AgriTalk. Mr. Adams: And welcome back to AgriTalk. We re reconvening a panel that got together last week in Washington, D.C. at the Farm Journal Forum. Talking trade, and joining us is Ellen Terpstra, President and CEO of the International Food and Agricultural Trade Policy Council; Nick Giordano, Vice President and Counsel for International Affairs with the National Pork Producers Council; Ambassador Darci Vetter, Chief Ag Negotiator for the U.S. Trade Representative s Office; and Stephanie Mercier, Senior Policy and Advocacy Advisor for the Farm Journal Foundation. We have talked a lot about the Trans- Pacific Partnership. Ambassador Vetter, can you bring us up to date, anything going on in the talks between the United States and the European Union over a trade deal? 4
Ms. Vetter: Absolutely. We are moving forward with what we call the TTIP, or the Transatlantic Trade and Investment Partnership, our trade agreement with the EU. In fact just this past week Ambassador Froman, our U.S. Trade Representative, and Cecilia Malmstrom, the Commissioner for Trade of the EU, met to lay out what they re calling a fresh start for the TTIP negotiations. For those of you paying attention to European politics, the new European Commission was just seated at the end of October, and so they ve been going through a political transition. But now that that commission is in place, the key priority is to really get those talks, put them into a higher gear, so to speak. So we expect a number of meetings to happen at the first of the year to outline how we will address key issues in the negotiations, and that the next formal negotiating round would take place in February. Mr. Adams: Nick Giordano, what s the potential here for the U.S. pork industry, and what are your concerns in these negotiations? Mr. Giordano: The potential for pork as fabulous. And as Ambassador Vetter said, we re much further along in the TPP, we re about to close, whereas in the TTIP, we ve got a lot of work to do. But I think that s good because it gives us an opportunity to work very hard to get the kind of outcome we need. And in short, for the pork industry and I think I can talk for my colleagues in the private sector in American agriculture what we re after is elimination of all tariffs. But when you re talking about the European Union, we all know is SPS issues, whether it s biotechnology, or in meat, pathogen reduction treatments, the way we produce our food in the United States. We think we ve got the gold standard farm to table. We think we produce food in a way that s sustainable, affordable, and the Europeans disagree. And I think so in some sense this is going to be a battle of systems. But when you look at our system and you look at the fact that three billion people are going to be added to the world s population within the next 30 years, I think it s pretty clear we need modern agriculture. I don t know a single person that s died of biotechnology. When you look at the economy like the European Union, competition and innovation are the backbone of any competitive economy, and you ve got to kind of scratch your head. So I think we ve got big issues here. Ambassador Vetter, Ambassador Froman, Secretary Vilsack and their negotiators have a steep climb, and we in the private sector have to be pushing hard. This is not going to be easy. Mr. Adams: Ambassador Vetter, given that history of differences on a lot of these key issues, and many of them going back many years, beef hormone issue and some of those, how optimistic are you that you can climb that steep hill that Nick just talked about? Ms. Vetter: Well, I am optimistic that we will be able to bridge that gap. And I think that if you look at the global economic crisis, the issues that have greatly 5
impacted the European and the U.S. economy over the past few years, I think we have an opportunity to focus on the fact that our trade and investment relationship is really critical to restoring some of that economic vitality, both for the United States and Europe, and was frankly, I think, the impetus for us coming together and agreeing to do an agreement that might include some hard decisions. And I think we can use that opportunity to address these issues. It will not be easy. I think we have, in some ways, a culturally different approach to how we regulate in the food and agriculture space that we will have to bridge. And there are, of course, significant SPS issues related to biotechnology, related to pathogen reduction treatments, that currently do inhibit trade. We ve actually seen our share of agricultural imports into Europe, our market share decline, definitely an opposite trend of what we re seeing in other countries around the globe, and so we do want to reverse that. But I think there s a way to have a conversation about, frankly, basing regulation on science, about coordinating with some regulators on how we move forward. And it s not just addressing current trade barriers, but trying to create a situation where we prevent future ones by really focusing on that scientific foundation and how our regulators can work together going forward. Again, a difficult conversation, but I think we have an opportunity like we ve never had before to try and address these issues in a comprehensive way. Mr. Adams: I want to switch to the WTO s Doha ag negotiations, the Doha round. We used to talk about those talks and discussions and negotiations all the time. Now we don t hear much about them. Ambassador Vetter, can you give us an update? What s going on there? Ms. Vetter: Well, we were extremely pleased that on Thanksgiving day this year we were able to break an impasse in Geneva that allowed the Trade Facilitation Agreement, which was agreed in Bali at the WTO ministerial last year, that allowed that agreement to go forward for implementation. And I think that s a significant breakthrough. It s the first new agreement that is being put forward in the WTO for many years. And frankly, it has the potential to fundamentally change the way that custom systems operate and really reduce both the cost, the time, and the risk associated with how goods, both agricultural and non-ag, move across borders. And independent studies that have looked at the Trade Facilitation Agreement think that it could be worth one trillion dollars in global commerce just by improving that certainty of the way goods move. But just as important, I think it added real needed momentum to the WTO system, and we want to use that momentum. Our task for 2015 is to put together what s called the Post Bali Work Program, that is, to try and address how the WTO is going to move forward. And in agriculture, we re looking specifically at what kinds of disciplines might we be able to agree to that create real market openings through specifically market access and tariff reduction, but also that address 6
issues like domestic support, like export subsidies, in a way that really allows us to expand trade opportunity and that puts all major countries at the table in adopting those commitments. Mr. Adams: Ellen Terpstra, in your background with USDA and FAS, you ve certainly been very involved with the Doha negotiations. What s your perspective on where we re at, and are you optimistic that we can see some kind of breakthrough in the future? Ms. Terpstra: I think if you look at the long-term, we have to look to the WTO to address some of the agricultural trade barriers around the world. Certainly there s over 1,000 tariff rate quotas that resulted from the Uruguay round. You d want to see some impact on those over the long-term. I d also raise another relatively new issue that didn t get perhaps as much attention in the Doha discussions to date as I hope it will in the future, and that is the use of export restrictions. We ve gone through a couple of periods of [price hikes] in global commodity prices since 2007-2008. I saw one study that said there were 900 actions taken around the 2008 price hikes, whereas a handful have ever been notified to the WTO. So looking ahead in terms of trade, in terms of food security issues, this is an important issue that I think the members of the WTO need to give some attention to. Mr. Adams: Nick Giordano, are you hopeful that we ll see something out of the Doha negotiations that can open up markets for us? Mr. Giordano: I m not a Doha optimistic. I m just not. I commend this administration and the one before it, and the one before it for going after things that are very important to the economic interests of the United States, but I m just very skeptical about our ability to get a deal in Doha. I m very concerned about the future of multilateral trade [globalization] through the WTO. I think the WTO is a great organization. Litigation and a lot of things that are done in the WTO that are important. But the good news is in spite of this gridlock in Doha, the United States is not a one note Johnny, and this TPP negotiation, if it looks like our other FTAs, will be the single most important FTA we ve ever done. And remember, in Doha or in any multilateral trade round, you don t eliminate tariffs. Tariff elimination is the heart of an FTA. In addition, when you look at what we ve done in recent FTAs like Korea, Colombia and Panama, it s amazing. So tremendous benefits for the United States. Should we keep forging ahead in Geneva and in Doha? Sure. Am I optimistic? I m not, which ups the ante to me to making sure we get a really good package in TPP and then looking at expanding TPP and keeping the pressure on the Europeans to make sure that the negotiation and what we end up with looks like a U.S. FTA, not a European FTA. 7
Mr. Adams: And Stephanie Mercier, that s why these discussions are so critical, and they do have a lot of ramifications, touch a lot of areas, more than a lot of people may realize. Ms. Mercier: Oh, clearly. I mean, we haven t really touched on it, but one of the important things about keeping the Doha round going is the importance of the WTO as an institution where all these countries can meet and discuss these issues, can undertake trade dispute settlement processes. And we need to keep the WTO a viable organization for those purposes, if for nothing else. Mr. Adams: I want to thank all of you for being with us Stephanie Mercier, Ambassador Darci Vetter, Nick Giordano and Ellen Terpstra. Thanks for joining us today on AgriTalk. [End of recording.] 8